Europe capro players set early March price targets

.LONDON (ICIS)--European caprolactam (capro) players have announced early price targets for March on Wednesday, with buyers and sellers sharply divided.

A major European caprolactam producer is targeting a price increase of €50/tonne ($65/tonne) in March contracts because of the need to restore margins against benzene.

The March benzene contract price increased by €14/tonne compared with February. The producer argued that weak profitability means that price increases beyond the benzene rise are necessary to restore profitability lost since mid-2011.

Between July 2011 and February 2013, capro contract prices have fallen by €230-290/tonne. In the same period, the benzene contract price has risen by €286/tonne.

Buyers are targeting a maximum increase of the benzene pass-through, as a result of weak demand and their own need to maintain margins downstream.

“Think it should be a rollover because of the [benzene] correction last month,” a buyer said. The February benzene contract price fell by €113/tonne compared with January, while capro contracts in Europe fell by a more limited €25-30/tonne.

Several sources continue to see weak demand, which, year-to-date, has been estimated at around 15% below 2012 levels in 2013. This has been attributed to weak macroeconomic conditions.